Bitcoin News Today: Bitcoin Loses Luster as Gold Surges, Challenging 'Digital Gold' Narrative

Bitcoin fell below $88,000 on December 1, 2025, extending a sharp selloff that erased over $1.2 trillion in crypto market value since October's peak of $126,000 according to market data. The decline, driven by tightening liquidity and shifting macroeconomic expectations, has intensified scrutiny over the asset's sensitivity to Federal Reserve policy and institutional positioning. With the Fed set to end its $6.6 trillion quantitative tightening (QT) program earlier than anticipated, market participants are weighing whether the central bank's pivot will provide a floor for Bitcoin or exacerbate near-term volatility as research shows.

The selloff coincided with renewed speculation about a potential December 2025 appointment of Kevin Hassett, a former Coinbase advisor, as the next Fed chair. Treasury Secretary Scott Bessent suggested the administration could announce a decision before Christmas, fueling bets on risk assets. Meanwhile, the Fed's decision to halt QT-announced November 30-has sparked debate over whether the move will inject liquidity into markets or merely delay a deeper correction. Analysts argue the decline is not systemic but a liquidity-driven correction tied to shifting expectations around rate cuts.

Institutional participation has further complicated the narrative. Over 17% of Bitcoin's supply is now held by companies or governments, with exchange-traded funds alone accounting for 7%. This shift has amplified Bitcoin's exposure to macro trends, as seen in November's sell-off, when investors rotated out of crypto entirely rather than into safer digital assets. However, proponents like Nicolai Søndergaard of Nansen stress that Bitcoin's decentralized nature remains intact despite centralized custody trends according to market analysis.

The selloff has also highlighted diverging performances between Bitcoin and traditional safe-haven assets. Gold surged over 55% in 2025, outpacing Bitcoin's 20% decline, as investors sought refuge from inflation and geopolitical risks. The "digital gold" narrative has faltered, with Bitcoin failing to replicate gold's role as a reserve asset. Central banks remain absent from Bitcoin markets, underscoring institutional skepticism.

Regional factors added to the volatility. Japan's Bank of Japan (BOJ) hinted at potential rate hikes after bond yields hit a 17-year high, triggering yen-strengthening bets that accelerated risk-off sentiment in Asia. Bitcoin dropped below $87,500 as traders unwound yen-funded carry trades, with over $150 million in long positions liquidated.

Market analysts point to a "triple threat" compounding the downturn: ETFs and corporations have reduced purchases, stablecoin activity has waned, and long-term holders are cashing out. Michael Saylor's MicroStrategy, a major Bitcoin buyer, paused its accumulation strategy, signaling caution. Despite these pressures, some experts remain cautiously optimistic. Bitcoin's weekly relative strength index (RSI) and rate-of-change indicators suggest oversold conditions, historically preceding rebounds.

The Fed's December 1 QT halt could offer a near-term reprieve, but structural challenges persist. With $6.6 trillion in Treasury bills requiring refinancing, liquidity remains fragile, and Bitcoin's price action will likely remain tethered to macro developments according to analysts. As Tim Meggs of Lo:Tech noted, the measured nature of the selloff-lacking the cascading liquidations seen in 2017 or 2022-reflects crypto's maturation, albeit with unresolved leverage risks according to market commentary.